How Contract Hire Can Save Your Company Money

Contract Hire is a method of renting a vehicle for personal or business purposes. It differs from standard vehicle hire in that the vehicle is leased over a longer period. Contract Hire is offered on 12 to 48 month contracts but typically lasts 3 years.

With Contract Hire a finance company supplies the vehicle and takes full responsibility for its depreciation, funding costs and administration. The finance company calculate a monthly rental price and usually demand a deposit of three months of the monthly rental value.

The lessor can request a contract that includes maintenance this only leaves insurance and fuel to be considered. The fixed pre-determined stream of rental payments makes it easy for the lesor to calculate their monthly outgoings.

Contract Hire is becoming increasingly popular in the UK. This is mostly due to the tendancy for company funded vehicles. It is particularly popular with businesses because it allows for accurate monthly budgeting, minimal running costs and the lesee does not have to suffer value depreciation they would experience if they bought a vehicle.

This method of hire also allows a business to update its vehicles regularly. This can be beneficial for maintaining the status of a company or, if being used as a company car, be a popular perk for its employees. Of course these benefits also apply to people using Contract Hire to hire a vehicle for personal use.

Contract Hire can appeal to a business as it is an extremely tax efficient method of funding a business vehicle. Full tax relief is available on cars worth up to 12,000 GBP. If your business is registered for VAT 100 percent of the VAT payable on the finance element of the rentals may be recovered.

If the vehicle is being used for personal use then only 50 percent if the VAT payable on the finance element of the rentals may be recovered. The fact that rentals may be offset against taxable profits make it a very popular option for a business. It can help improve the cash flow and tax position of your business.

Indeed 40 percent of V.A.T Registered companies choose this funding method. The UK industry is considered the largest best managed in the world. The industry representative body BVRLA (British Vehicle Rental and Leasing Association) has nearly 2 million vehicles in its management.

The industry has seen steady growth since the first statistics were published in 1990. More than 50 companies now offer this type of supply. Fleet statistics are reviewed and published annually by EMAP.

Additional benefits of Contract Hire include; minimal capital expenditure (you do not have to pay for the vehicle) reduced administration (administration is minimal) and no disposal worries (when the agreement ends the vehicle remains the property of the lessor and never becomes property of the lesee). Contract Hire is available to Individuals, Sole Traders, Partnerships and Ltd Companies.

4 Habits That Help You Gain The Ability To Save Money

Ability to save money is a basic skill that every individual should possess. This skill can be built only when you follow certain important steps, having internal motivation and positive attitude. In order to acquire the ability to save money, you need to inculcate some habits that may be painful but will help you reach your savings goals.

Here are 4 such habits which will help you gain the ability to save money.

Track your spending create a budget
For many people, creating budget is very boring and painful. But, the fact is, you cannot understand your spending without having a proper budget. It is a tool that helps you know where your money is going.

You need to allot a specific amount of your income for every head. The various heads are food, clothing, transportation, entertainment, health, etc. Assume that you have budgeted Rs. 2000/- for food in a month, then, you need to limit your spending on the food throughout the month to the amount set.

Budgeting helps you plan before your spend. Thus, budgeting is a crucial step to save money as it allows you to control your spending. Otherwise, you may not know how much amount of your money is being wasted.

Spend less than you earn
This is the basic motto of personal finance. As an earning individual, you should understand that, spending less than what you earn will help you reach the ability to save money. No matter, how much you earn, you need to live within your means to lead a sensible life.

Once you start spending more money than what you earn, you start thinking about taking debt and purchasing things on debt. Debt is a kind of addiction, once you get habituated to it, you find it difficult to get out of the debt-trap. So, stay away from credit cards and people (friends/relatives etc.) who provide or accept debt.

Control spending
Controlling spending does not mean that you need to behave like a miser. It only means that you should spend money wisely.

For instance, avoiding eating out daily will not only help you control spending but also will help you stay away from bad health issues. Eating out only on special occasions with your family would let you enjoy the food.

So, limit your desires. Spend money only when you have accumulated enough savings for emergencies and future expenses. You must practice self-control to reach the ability to save money.

Inculcate disciplined savings
Try to inculcate the habit of saving. Set some amount of your income as savings. By preparing a budget, you can understand how much amount of money you can set aside as savings.

You need to save money following a step-by-step process. Start saving small amounts of money on a monthly basis. Open separate bank accounts for -

Non-monthly expenses like clothes, shoes, etc.
Short-term savings for purchasing electronic gadgets (computer, Television etc.), buying a vehicle (bike or car).
Long-term savings for buying a house, kid's marriage, etc.

Self-motivation is the key to inculcate the habit of savings. Following these steps sincerely would help you achieve the ability to save money.

How a Trust Deed could save your

In 1997, Marian van Overwaele refused to pay a 230 bill for bridalware. In 2010 thirteen years later - she and her family are granted a 14-day reprieve from eviction of her home - Knockderry Castle - after the legal costs defending the non-payment of the bill reached almost 1 million and caused her to be sequestered. To this day, no-one really knows why the case became so drawn out, expensive and antagonistic, but one thing is clear; like many cases before this one, things got out of control quickly and points in the proceedings where everything could have been resolved were missed. A number of debt solutions were available for the debt to be paid, but none were used.

The background to case starts simply and then veers off into one of the most complex legal cases Scotland has ever seen. After Mrs Van Overwaele failed to pay a 230 bill, a bridalware company took her to court for non-payment and was granted a court order against her. Despite this, Mrs Van Overwaele still did not pay and in 1998 the courts served a demand for 1573, the original 230 bill plus interest, expenses and costs. Mrs Van Overwaele still did not pay. In January 2000 Mrs Van Overwaele is sequestered for non-payment of the debt and her case is handed over to an Insolvency Practitioner.

It was then that Mrs Van Overwaele tried to pay 1800 towards the debt, which was refused as by this time she was legally bankrupt and the debt had mushroomed to 30,000. A subsequent appeal by her to the Sheriff was turned down in 2001. Mrs Van Overwaele appealed against the sequestration to the House of Lords in October 2002 and to the Court of Session in 2004, both of which were dismissed. By December 2009, Mrs Van Overwaele had appealed to the Court of Session again, this time to stop the repossession and sale of her home the 3million Knockderry Castle. This also failed. In January 2010 Mrs Van Overwaele sold the castle to her brother for 1million in an attempt to prevent it being sold by the Insolvency Practitioner. While the sale went through, the legal system did not see it as a legal because the castle did not belong to her but to the Insolvency Practitioner appointed to help her creditors recover their money. In October 2010 the bailiffs moved in to evict the family, but the family were given a temporary stay of execution and there they still are until the next round, some 700,000 worse off than they were 13 thirteen years ago and having cost the state and other parties concerned just under 300,000 to prosecute.

So what lessons can be learned about sequestration and debt solutions like Trust Deeds from this high profile case?

1) Complain quickly and use the correct procedures.

If you have a complaint about goods or services and you do not wish to pay, you must make your refusal to pay and the reasons why known quickly and in writing. If you do not tell a company and simply decide not to pay a bill, when you are taken to court you stand a greater chance of the case going against you for failure to pay. You are assumed to be happy with goods and services if you do not complain.

2) Do not ignore court orders

Whatever you do, do not ignore a court order and hope it will go away. By all means appeal, or if you feel that things are escalating beyond a point where it makes financial sense to carry on, pay what you owe and put it behind you. If you cannot pay at the moment, try and arrange a payment plan, either outside of or inside of a DAS or Trust Deed.

Refusing to pay out of anger, principle' or denial will only serve to make the case against you stronger and more likely to succeed if your creditors take you to court to request your sequestration to recover their money.

3) Understand the consequences of missing deadlines

Mrs Van Overwaele repeatedly failed to respond to important developments in her case. The only occasion where she attempted to make a payment was after her sequestration, far too late to do anything as all of her assets were the legal property of an Insolvency Practitioner. Perhaps she didn't understand what was happening, perhaps she underestimated the severity of what was happening. She may even have been in denial that her home could ever be taken over a debt so small. Whatever the reason, missing deadlines for payment and legal responses has led Mrs Van Overwaele down the path she is on.

Trust Deeds can turn a really bad situation around very quickly, although they wouldn't have worked for Mrs Van Overwaele, as she had the money to pay off the debt but for her own reasons chose not to. Hers was case of won't pay' rather than can't pay'. However if your castle' is in danger of being repossessed because you are in financial difficulty or you have debts you can't pay any longer, then a Trust Deed could help stop your problems spiraling out of control.